Discovery Inc.’s Q2 profits sink under weight of Scripps acquisition charges

Discovery Inc.
The Scripps deal expenses ate into Discovery Inc.'s profits. (Discovery Inc.)

Discovery Inc.’s second-quarter net income fell 42% to $216 million, down from $374 million one year ago, under the weight of expenses associated with the Scripps acquisition.

While the Scripps acquisition had a negative impact on net income, elsewhere it lifted Discovery’s overall earnings. Second-quarter revenues rose 63% to about $2.8 billion. Factoring out the Scripps, Motor Trend and Oprah Winfrey Network transactions, Discovery posted a 5% increase in International Networks revenues and a 1% decrease in U.S. Networks.

Second-quarter Adjusted OIBDA rose 69% to $1.2 billion but, excluding the impact of the transactions and foreign currency effects, adjusted OIBDA rose 12% at International Networks and declined 4% at U.S. Networks.

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“We delivered solid financial results in our first full quarter as a combined company and continued to make great progress with our integration of Scripps Networks Interactive and our pivot to digital, mobile and direct to consumer products and services,” said David Zaslav, president and CEO for Discovery, in a statement. "As the global leader in real life entertainment, we are uniquely positioned in the media marketplace to deliver longterm value for our passionate superfans, shareholders and business partners around the world.”

The revenue decrease at U.S. Networks, after factoring out the transactions, was due mostly flat distribution and advertising revenues being offset by other revenues falling 33% due to lower program and merchandising sales.

At International Networks, after factoring out the transactions, revenues increased 5% thanks to a 6% increase in distribution revenues and a 60% increase in other revenues, while advertising revenues remained flat.

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